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Mind-altering drugs could be as common as coffee within a couple of decades to boost performance at school and at work, to "unlearn"

addiction and to erase memories of distressing events such as a terrorist attack, according to a government think-tank.

Society may end up realising Aldous Huxley's vision of a Brave New World in which people take a supposedly perfect pleasure-drug, Soma - though the report shies away from discussing whether future governments will be tempted to encourage the use of "happy pills" for social control.

The Foresight think-tank points out that psychoactive substances have been part of society for thousands of years. It heralds the development of new recreational drugs, some of which might be less harmful than those already costing society around ?13 billion annually, mostly due to crime.

"Psychoactivedrug use may spread more across the life course and may become more common than is currently evident in middle-aged or even older age groups."

One of the team that produced the report, Drugs Futures 2025?, Prof Gerry Simpson, of Imperial College London, said: "If there is such a thing as Huxley's Soma, that really does raise crucial questions for governments around the world about how legitimately to regulate a substance like that."

Sir David King, the Prime Minister's chief scientific adviser, who led the think-tank, said: "We are on the verge of developments that could possibly move us into a world where we could take a drug to help us think faster, relax, sleep more efficiently or even subtly alter our mood to match that of our friends."

In addition to drugs that boost pleasure and sexual performance, the report raises the possibility of drugs that cause selective amnesia, for instance of a bomb attack, after the discovery that substances called beta blockers can reduce memories of stressful situations.

But the report warns that there are potential abuses of a tool that makes people forget, "examined in a number of films such as Total Recall or The Eternal Sunshine of the Spotless Mind, where characters are able to forget about painful relationships".

Other possibilities would be drug testing of children before they took exams to ensure that some did not cheat with cognitive enhancers, or "cogs".

"The ethical debate about whether or nor to use drugs to improve performance in normal schoolchildren and students will probably be resolved over the next 20 years," said the report. "Similarly, there will be continued debate about the ethics of using cognition enhancers in the workplace."

However, it added: "In a world that is increasingly non-stop and competitive, the individual's use of such substances may move from the fringe to the norm, with cognition enhancers used as coffee is today."

One problem raised by the report is that the pharmaceutical industry might change its focus from drugs that treat mental health to cognitive enhancers, "mental cosmetics" and treatments for addiction.

"The pharmaceutical industry may not make new medicines for mental health conditions," he said.

The report lists existing cognitive enhancing drugs, such as modafinil (Provigil), which was developed for sleeping disorders, and methylphenidate (Ritalin), a treatment for attention deficit hyperactivity disorder. Both are already being used to improve alertness and performance, including by students.

"Modafinil improves working memory, that is your ability to remember telephone numbers, to give you an extra digit or two, and improve your planning when you are tackling chess-like problems," said Prof Trevor Robbins of the University of Cambridge. "The drug makes you less impulsive and more reflective about a problem."

Sir David said yesterday that the findings of the think-tank were "independent of government and don't constitute government policy. It is for government to respond."